Contrasting OP Bancorp (NASDAQ:OPBK) and Five Star Bancorp (NASDAQ:FSBC)

OP Bancorp (NASDAQ:OPBK) and Five Star Bancorp (NASDAQ:FSBC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Dividends

OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 5.1%. Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.6%. OP Bancorp pays out 31.2% of its earnings in the form of a dividend. Five Star Bancorp pays out 28.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Five Star Bancorp has increased its dividend for 1 consecutive years.

Profitability

This table compares OP Bancorp and Five Star Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OP Bancorp	17.61%	12.85%	1.11%
Five Star Bancorp	26.24%	17.52%	1.37%

Institutional and Insider Ownership

53.6% of OP Bancorp shares are held by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are held by institutional investors. 24.9% of OP Bancorp shares are held by insiders. Comparatively, 25.6% of Five Star Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

OP Bancorp has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Earnings and Valuation

This table compares OP Bancorp and Five Star Bancorp’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OP Bancorp	$135.85 million	1.03	$23.92 million	$1.54	6.06
Five Star Bancorp	$181.89 million	2.10	$47.73 million	$2.78	7.90

Five Star Bancorp has higher revenue and earnings than OP Bancorp. OP Bancorp is trading at a lower price-to-earnings ratio than Five Star Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for OP Bancorp and Five Star Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OP Bancorp	0	0	0	0	N/A
Five Star Bancorp	0	1	2	0	2.67

Five Star Bancorp has a consensus target price of $27.00, suggesting a potential upside of 22.89%. Given Five Star Bancorp’s higher possible upside, analysts clearly believe Five Star Bancorp is more favorable than OP Bancorp.

Summary

Five Star Bancorp beats OP Bancorp on 13 of the 16 factors compared between the two stocks.

About OP Bancorp

OP Bancorp operates as the bank holding company for Open Bank that provides banking products and services in California. It offers demand, checking, savings, money market, and time deposit accounts, as well as certificates of deposit. The company also provides commercial real estate, small business administration, commercial and industrial business, single-family residential, term, consumer, and home mortgage loans; trade financing products; and letters of credit, and SWIFT and export advice. In addition, it offers debit and credit card, online transfer and bill payment, electronic delivery of customer statements, and mobile banking solutions for iPhone and Android phones, including remote check deposit with mobile bill pay; direct deposits, cashier's checks, person to person payments, wire transfers, and automated clearing house (ACH) services; and cash management services, including balance reporting, transfers between accounts, wire transfer initiation, ACH origination, and stop payment services, as well as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company operates full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara in California; and Carrollton, Texas. It also has loan production offices in Atlanta, Georgia; Aurora, Colorado; and Lynnwood and Seattle in Washington. The company was founded in 2005 and is headquartered in Los Angeles, California.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.